Is the wallstreet trapper a scam?
June 8, 2022 7:41 PM Subscribe
My friend wants to buy the wallstreet trappers course to learn stocks for $1,997. It seems sketchy to me. Is it legit? Is it a scam?
https://www.thetrappermethod.com
What DirtyOldTown said, but just to add to that, saying "Intake is now closed!" like this thing is doing is an immediate red flag. Creating a sense of (false) urgency is the hallmark of any scam.
Basically, this has the look and feel of "Trump U, but for stocks instead of real estate."
But here's the other part of why it's obviously a scam, IMO: I've worked with stock analysts and with people who are in charge of running investment portfolios for banks.
They have supreme difficulty, even in their best-performing years, of "beating the market" or "picking winners," despite the fact that they have entire teams at their disposal whose job is researching those companies and stocks.
These are people like this, as one example: A mining stock analyst who is a P. Geo, with work experience in the mining industry, who is now also a CPA and CFA, and is modelling the future performance of companies they cover.
If there was a "method," these are the people who would be on it. There is no "method," as is purported by this particular "I have a method nobody knows about" individual.
Your friend would do better by buying an index fund with that $1,997 and hanging on to that for 10 years.
posted by mandolin conspiracy at 8:11 PM on June 8, 2022 [23 favorites]
Basically, this has the look and feel of "Trump U, but for stocks instead of real estate."
But here's the other part of why it's obviously a scam, IMO: I've worked with stock analysts and with people who are in charge of running investment portfolios for banks.
They have supreme difficulty, even in their best-performing years, of "beating the market" or "picking winners," despite the fact that they have entire teams at their disposal whose job is researching those companies and stocks.
These are people like this, as one example: A mining stock analyst who is a P. Geo, with work experience in the mining industry, who is now also a CPA and CFA, and is modelling the future performance of companies they cover.
If there was a "method," these are the people who would be on it. There is no "method," as is purported by this particular "I have a method nobody knows about" individual.
Your friend would do better by buying an index fund with that $1,997 and hanging on to that for 10 years.
posted by mandolin conspiracy at 8:11 PM on June 8, 2022 [23 favorites]
Best answer: I have no doubt that Trap will, in fact, provide precisely what he promises to: four presentations over zoom covering basic stock market concepts, two stock valuation formulas, the names of two companies, and a set of worksheets and checklists. Whether that's worth two grand is perhaps the first test of your friend's investment savvy.
posted by ook at 8:55 PM on June 8, 2022 [46 favorites]
posted by ook at 8:55 PM on June 8, 2022 [46 favorites]
The fact that I can find the almost same course by same guy for $997 should tell you this is all hype.
posted by kschang at 9:49 PM on June 8, 2022 [4 favorites]
posted by kschang at 9:49 PM on June 8, 2022 [4 favorites]
You note that this seems sketchy. I agree, it does. My advice is: everything that seems sketchy, almost certainly is sketchy. Also, some things that seem solid are sketchy too. Some portion of things that seem solid are actually solid. I would dismiss this out of hand.
What rings hollowest to me is the repeated testimonial "18 months ago I had $10.46 in my account, now 18 months later I passed 100k in that same account..."
The implication is that this person achieved truly astonishing returns, returns way way outside what professional traders achieve. Even if this is true (and I kinda doubt it), highlighting it as though you the reader are also going to achieve this strikes me as very unethical.
But you know what else? In my country there's a current fad for hawking forex trading systems. It's really an MLM scheme for selling the training and the software because forex is a hard game where most people lose. And like most MLMs, it spreads along people's existing networks. And where I live, it's targeting ethnic minorities. I consider it predatory, exploiting the economic oppression and desperation of victims of racism. When I see this website and its imagery, what I see is a similar attempt.
posted by i_am_joe's_spleen at 9:54 PM on June 8, 2022 [4 favorites]
What rings hollowest to me is the repeated testimonial "18 months ago I had $10.46 in my account, now 18 months later I passed 100k in that same account..."
The implication is that this person achieved truly astonishing returns, returns way way outside what professional traders achieve. Even if this is true (and I kinda doubt it), highlighting it as though you the reader are also going to achieve this strikes me as very unethical.
But you know what else? In my country there's a current fad for hawking forex trading systems. It's really an MLM scheme for selling the training and the software because forex is a hard game where most people lose. And like most MLMs, it spreads along people's existing networks. And where I live, it's targeting ethnic minorities. I consider it predatory, exploiting the economic oppression and desperation of victims of racism. When I see this website and its imagery, what I see is a similar attempt.
posted by i_am_joe's_spleen at 9:54 PM on June 8, 2022 [4 favorites]
I agree with just about everything that's been said.
The whole first round sold out thing is the closest thing to a scam that I detected. Classic pressure technique. But I agree with ook that they probably will deliver everything listed (and that it'll probably be higher quality than Trump University) but not necessarily worth $2K. You can find free content on all of those subjects.
And to mandolin conspiracy's point about methods, the past 15 years have delivered exceptional returns compared to the history of the market. It's also been a time with an intentionally very low set of interest rates which has also distorted things. So a method that was developed during that time may have genuinely outperformed the market (or at least made a lot of money) but that doesn't mean that the method will still work going forward.
I have a method or two and a small amount of gambling money that I experiment with using them and have done exceptionally well in some cases. But also exceptionally poorly.
Which is why the vast majority of my investments are in very standard index funds, which is really what just about everyone should have rather than trying to pick individual stocks. Which is advice you can get for free on the internet or by checking out the book A Random Walk Down Wallstreet from the library. You don't need to pay $2K to get solid investment advice.
posted by Candleman at 9:55 PM on June 8, 2022
The whole first round sold out thing is the closest thing to a scam that I detected. Classic pressure technique. But I agree with ook that they probably will deliver everything listed (and that it'll probably be higher quality than Trump University) but not necessarily worth $2K. You can find free content on all of those subjects.
And to mandolin conspiracy's point about methods, the past 15 years have delivered exceptional returns compared to the history of the market. It's also been a time with an intentionally very low set of interest rates which has also distorted things. So a method that was developed during that time may have genuinely outperformed the market (or at least made a lot of money) but that doesn't mean that the method will still work going forward.
I have a method or two and a small amount of gambling money that I experiment with using them and have done exceptionally well in some cases. But also exceptionally poorly.
Which is why the vast majority of my investments are in very standard index funds, which is really what just about everyone should have rather than trying to pick individual stocks. Which is advice you can get for free on the internet or by checking out the book A Random Walk Down Wallstreet from the library. You don't need to pay $2K to get solid investment advice.
posted by Candleman at 9:55 PM on June 8, 2022
What rings hollowest to me is the repeated testimonial "18 months ago I had $10.46 in my account, now 18 months later I passed 100k in that same account..."
I missed that skimming the site. Yes, that is an extremely dubious claim. Even allowing for an asterisk of "and I was putting $3K/month into the account in addition to what I was making with investments," that phrasing is sketchy at best.
posted by Candleman at 10:00 PM on June 8, 2022
I missed that skimming the site. Yes, that is an extremely dubious claim. Even allowing for an asterisk of "and I was putting $3K/month into the account in addition to what I was making with investments," that phrasing is sketchy at best.
posted by Candleman at 10:00 PM on June 8, 2022
Regarding "conspiracy of methods"... Selling "shortcuts to wealth" has been a very long hustle done by a LOT of people, everybody from get-rich-quick-version-X to "gospel of prosperity", if someone can make money off of it, you can bet someone will be selling a course teaching others about how to do it, be it stock market, crypto, MLM, and so on. There is some truth in the joke: "Those who can, do; those who can't, teach." (George Bernard Shaw, 1903)
posted by kschang at 10:49 PM on June 8, 2022
posted by kschang at 10:49 PM on June 8, 2022
You can learn all of this for free pretty easily between YouTube, the rest of the internet, and your local library.
posted by Slinga at 2:45 AM on June 9, 2022
posted by Slinga at 2:45 AM on June 9, 2022
I do something very similar to this for a living have a CFA, etc.
Here's the thing: all the mathematical logic on different ways to value a stock are, as ook has noted, freely and widely available. There are many excellent books on how to build models to do it at whatever level of complexity (and assumed control) desired. It's all either free (non-current CFA materials are widely available for basically nothing).
The difficulty is not in building a model or understanding the "secret" math. We teach 22 year olds that over the course of a few weeks.
The difficulty is in coming up with the inputs and doing a better job of that than the rest of the market. It's all very well saying "if Tesla grows EPS by X% for Y% years, how much should you be willing to pay for their stock today?" however how do you determine what X and Y should be? That is very hard!
mandolin conspiracy notes their acquaintance who has deep experience of mining and covers mining stocks, that is entirely typical. The people who cover particular kinds of stocks know *a lot* about the "valuation drivers" aka the key inputs in the sectors they cover. Their preferred hires are very clever, experienced, and hard working people with experience in the sector being covered. They still get things wrong about as often as right and being right 55% of the time means you get to be very, very well paid.
If your friend has really deep insights into a particular part of the economy, then maybe they could do this for a living and get some benefit out of a course that taught them
Finally, like most people who do this professionally, I keep all of my own money in very low fee index funds. I invite you to consider what that might mean...
What rings hollowest to me is the repeated testimonial "18 months ago I had $10.46 in my account, now 18 months later I passed 100k in that same account..."
Exercise 1: calculate the IRR and annual return and compare this to the unlevered return of literally any traded stock on any exchange. Also note what the testimonial doesn't say - what was the money weighted return? If I put $10.46 in my account, lose that money and then put $100k into that same account 18 months - one day later then the testimonial statement is still true.
posted by atrazine at 8:39 AM on June 9, 2022 [8 favorites]
Here's the thing: all the mathematical logic on different ways to value a stock are, as ook has noted, freely and widely available. There are many excellent books on how to build models to do it at whatever level of complexity (and assumed control) desired. It's all either free (non-current CFA materials are widely available for basically nothing).
The difficulty is not in building a model or understanding the "secret" math. We teach 22 year olds that over the course of a few weeks.
The difficulty is in coming up with the inputs and doing a better job of that than the rest of the market. It's all very well saying "if Tesla grows EPS by X% for Y% years, how much should you be willing to pay for their stock today?" however how do you determine what X and Y should be? That is very hard!
mandolin conspiracy notes their acquaintance who has deep experience of mining and covers mining stocks, that is entirely typical. The people who cover particular kinds of stocks know *a lot* about the "valuation drivers" aka the key inputs in the sectors they cover. Their preferred hires are very clever, experienced, and hard working people with experience in the sector being covered. They still get things wrong about as often as right and being right 55% of the time means you get to be very, very well paid.
If your friend has really deep insights into a particular part of the economy, then maybe they could do this for a living and get some benefit out of a course that taught them
Finally, like most people who do this professionally, I keep all of my own money in very low fee index funds. I invite you to consider what that might mean...
What rings hollowest to me is the repeated testimonial "18 months ago I had $10.46 in my account, now 18 months later I passed 100k in that same account..."
Exercise 1: calculate the IRR and annual return and compare this to the unlevered return of literally any traded stock on any exchange. Also note what the testimonial doesn't say - what was the money weighted return? If I put $10.46 in my account, lose that money and then put $100k into that same account 18 months - one day later then the testimonial statement is still true.
posted by atrazine at 8:39 AM on June 9, 2022 [8 favorites]
it might be worth pointing out to your friend that, except in the cases where hedgies are doing insider trading, or just have dumb luck, hedge funds do worse or just about the same as simple index funds like Vanguard. Hedge funds are the places where all the people who "know the secrets" about making money on the market get hired, and they still can't beat an index fund, so why would some guy selling courses be able to teach you to do better than them? If a hedge fund beats the market one year, everyone thinks they know the secret, but it was probably just random chance, or it was criminal insider trading, like Steve Cohen, the guy who really made hedge funds a thing, was doing when he was doing so well.
posted by dis_integration at 9:09 AM on June 9, 2022 [1 favorite]
posted by dis_integration at 9:09 AM on June 9, 2022 [1 favorite]
If your friend has really deep insights into a particular part of the economy, then maybe they could do this for a living and get some benefit out of a course that taught them
Sorry, didn't finish my thought here. Should say:
If your friend has really deep insights into a particular part of the economy, then maybe they could do this for a living and get some benefit out of a course that taught them the mechanics of valuation (since they already have the really valuable bit which is what the valuation inputs will be). However this course ain't it.
posted by atrazine at 9:47 AM on June 9, 2022
Sorry, didn't finish my thought here. Should say:
If your friend has really deep insights into a particular part of the economy, then maybe they could do this for a living and get some benefit out of a course that taught them the mechanics of valuation (since they already have the really valuable bit which is what the valuation inputs will be). However this course ain't it.
posted by atrazine at 9:47 AM on June 9, 2022
My company considers it such a scam I can't even see the website while at work.
posted by The_Vegetables at 12:22 PM on June 9, 2022 [2 favorites]
posted by The_Vegetables at 12:22 PM on June 9, 2022 [2 favorites]
This thread is closed to new comments.
People advertise to the people they want money from. The people who buy this course are the person's source of income.
posted by DirtyOldTown at 7:43 PM on June 8, 2022 [67 favorites]